European stocks head for 7th weekly gain

Yen at two-month high up on rate trek bets

Gold steady near record peak

By Amanda Cooper

LONDON, Feb 7 (Reuters) -

U.S. stock futures steadied on Friday ahead of U.S. payrolls data, with investors cautiously positive that the world may avoid a full-on trade war, while the prospect of more rate hikes in Japan this year briefly sent the yen towards two-month highs.

In a week that began with U.S. President Donald Trump kicking off a trade war and whipping up market volatility, investors have actually watched out for making any major relocations, provided that he followed through on his danger to impose duties on China while approving Mexico and Canada a one-month reprieve.

The necessary U.S. tasks report for January is due ahead of the Wall Street open. Economists expect to see 170,000 workers included to nonfarm payrolls last month, but offered the potential distortions from spells of cold weather condition and the California wildfires, the range of projections is wide.

"The focus for the financial markets in current weeks has been quite on Trump and his economic policies, in particular on trade, but today there is the capacity for the tasks information to affect Fed rate expectations," Derek Halpenny, a currency strategist at MUFG, said.

"A quite large divergence from the agreement is still most likely required to shift expectations especially but severe weather at this time of the year has in the past resulted in greatly weaker NFP readings and weather condition could impact today ´ s report," he said.

Futures on the Nasdaq and S&P 500 were trading mainly steady on the day, while shares of

Amazon

insinuated premarket on the back of

weak point

in the retailer's cloud unit.

In Europe, the STOXX 600 headed for a seventh straight week of gains, trading flat on the day after having hit record highs earlier this week, following a spate of strong profits from the similarity Danish weight-loss drugmaker Novo Nordisk, German software business SAP and French lender BNP Paribas.

European stocks have staged their finest efficiency in a years against Wall Street in the first 6 weeks of 2025, however the focus is now on whether those gains can be sustained.

On the Asian market, tech stocks staged a rally, powered by Chinese retail investors, who have actually attacked on the AI theme in the wake of home-grown start-up DeepSeek's advancement.

DELICATE CHINA

Beijing's seemingly determined reaction to Trump's tariffs has actually left room for settlements, experts say, which has assisted repair financier sentiment.

China's blue-chip stock index closed up 1.3% after touching a one-month high.

"Whilst there is considerable noise and uncertainty, we do not see intensifying trade stress as a game changer in the prospects for the Chinese market," said James Cook, investment director for emerging markets at Federated Hermes.

Markets are pricing in 43 basis points of easing this year from the Fed, with a rate cut in July fully priced in, as policymakers remain in no hurry to start the rate-cutting cycle again.

The dollar edged up 0.1% against a basket of currencies, having actually rallied 7% in 2015, smfsimple.com as financiers priced in an even more aggressive policy stance from the Fed this year, where rate cuts may be rare.

Other main banks are cutting rate of interest, while the Bank of Japan is tailoring up for a minimum of another rate trek this year. Strong wage development data has beefed up the opportunities of tighter monetary policy, which has actually pressed the yen to two-month highs against the dollar.

The yen touched 150.96 per dollar over night, its strongest level considering that December 10, before relieving to leave the dollar up 0.4% on the day at 152.155.

Sterling reversed earlier losses to increase 0.1% to $1.2449, having actually dropped 0.5% on Thursday as the BoE cut rate of interest and slashed its 2025 UK development projection.

In commodities, oil edged up, while gold steadied above $2,800 an ounce, near to record highs.

(Additional reporting by Ankur Banerjee in Singapore; additional reporting by Stephen Culp, Marc Jones and Alun John; modifying by Shri Navaratnam, Sam Holmes, Gareth Jones and Angus MacSwan)